Question 1

Are we seeing a permanent end to the decade-long trend of falling telecom prices?

Accepted Answer

The September 2023 quarter marked a significant pivot, with telecoms prices rising 1.9%, outpacing the general CPI increase of 1.2% for the first time since 2013. While year-on-year telecoms inflation remains low at 0.8% compared to the broader 5.4% CPI, the structural shift toward inflation-linked pricing suggests the deflationary era is concluding.

Question 2

What specific factors are forcing prices up after years of deflation?

Accepted Answer

Price growth is driven by Telstra’s adoption of annual inflation-linked increases and the implementation of nbn’s new Special Access Undertaking (SAU) pricing structure. These changes are necessary to offset rising operational costs in security and resilience, addressing a decade of underperformance where the telecoms price index fell to 76 while general prices rose to 135.

Question 3

How is the new nbn pricing structure impacting the market?

Accepted Answer

The nbn SAU is fundamentally altering the cost base by making high-volume, lower-speed plans more expensive for retailers. This structural change forces operators to raise consumer prices to maintain margins, contributing to the 1.9% quarterly sub-index spike observed in late 2023.

What’s the likelihood of telecoms price inflation?

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